figure 4.5 annual costs –jeepney - jica · 2005-12-19 · 40 29.4 18.1 19.7 50 28.8 17.7 19.0 60...

METRO MANILA URBAN TRANSPORTATION INTEGRATION STUDY

TECHNICAL REPORT NO. 9: PUBLIC TRANSPORTATION

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FIGURE 4.5ANNUAL COSTS –JEEPNEY

FIGURE 4.6ANNUAL COSTS – NEW BUS

FIGURE 4.7COSTS – RECONDITIONED BUS



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TABLE 4.2PERCENTAGE OF DISTANCE-RELATED COSTS THAT ARE INCURRED FOR FUEL

Average Speed(km./hr.)

Jeepney New Bus Reconditioned Bus

10 34.8 22.2 24.820 32.5 20.3 22.530 30.6 18.8 20.740 29.4 18.1 19.750 28.8 17.7 19.060 29.1 18.2 19.470 30.1 19.3 20.280 31.8 20.5 21.290 33.3 20.9 21.5

It can be seen that fuel accounts for about 1/3 of the distance-related costs (includingdistance-related depreciation) of jeepney, and between 1/5 and 1/4 of these costs forbus. Fuel comprises a higher percentage of reconditioned bus costs as, while thesehave been assumed to have higher maintenance costs per km. run, the distance-relateddepreciation charge is calculated on a much lower capital cost (see Tables 4.4 and4.5).

Other features of Figures 4.5 to 4.7 are as follows:

• The relatively high proportion of standing costs (light bar) in jeepney costs—thebase DPWH utilization assumptions reflecting the tendency for jeepneys to spenda lot of time at terminals between runs, either waiting for a full load or waiting fortheir turn at the head of the queue (see Figure 4.1);

• Lower distance-related cost for reconditioned bus, as well as lower standingcost—the lower depreciation charge per 1,000 km. outweighs the highermaintenance cost assumed; and

• An increase in total cost as speed falls below 20 km./hr.—the increase in crewcost with the greater hours of use needed to achieve the assumed vehicle km.outweighs the combined effect of the decrease in distance-related cost per 1,000km. at the lower speed and the reduction in km. run.

To further investigate the latter phenomenon, and to generate detailed costs for speedsbelow 10 km./hr. (which are not output by the VOCM), total cost estimates at 1km./hr. intervals were generated for speeds from 1 to 20 km./hr. For speeds below 10km./hr., the distance-related cost at 10 km./hr. was used as the relationships in VOCMwill not accurately produce cost estimates below that speed. This reflects reality inManila, where low average speed between terminals results from a combination ofmovement at reasonable speed punctuated by periods of standing at traffic signals orat stopping places while trying to attract more custom (and incurring only standingcost).



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TABLE 4.3VEHICLE UTILIZATION AND ANNUAL OPERATING COST AT LOW SPEED - JEEPNEY

Vehicle Cost To Be Depreciated Over Time 52,928 Crew Cost per Hour 26.88Annual Interest Charge 27,244 Overheads as % of All Other Costs 5%

(10% on 50% of the fleet)

Average SpeedDistance Related Costs Annual‘000 km. run Cost

Time Related CostsLifetime Dep’n/ Hours Annual(yrs) year of Use Cost

Total CostPer year Per km. run Per hour run

3 21.71 64,320 13.17 4,018 8,014 262,217 326,538 15.04 14.114 22.29 66,013 12.92 4,096 6,367 215,919 281,932 12.65 50.605 22.86 67,706 12.69 4,172 5,388 188,435 256,141 11.21 56.036 23.43 69,398 12.46 4,247 4,741 170,359 239,757 10.23 61.407 24.00 71,091 12.25 4,321 4,286 157,657 228,748 9.53 66.728 24.57 72,784 12.05 4,394 3,949 148,314 221,098 9.00 71.009 25.14 74,476 11.85 4,466 3,692 141,211 215,687 8.58 77.2110 25.71 76,169 11.67 4,537 3,490 135,674 211,843 8.24 82.3811 26.29 77,322 11.49 4,607 3,328 131,249 208,572 7.93 87.2812 26.86 78,452 11.32 4,676 3,197 127,678 206,130 7.68 92.1013 27.43 79,558 11.16 4,744 3,089 124,763 204,321 7.45 96.8414 28.00 80.641 11.00 4,812 3,000 122,362 203,003 7.25 101.5015 28.57 81,701 10.85 4,878 2,925 120,373 202,074 7.07 106.0916 29.14 82,737 10.71 4,944 2,862 118,718 201,454 6.91 110.6017 29.71 83,749 10.57 5,009 2,809 117,337 201,086 6.77 115.0418 30.29 84,738 10.43 5,073 2,764 116,185 200,923 6.63 119.4219 30.86 85,704 10..31 5,136 2,726 115,225 200,929 6.51 123.7220 31.43 86,646 10.18 5,198 2,694 114,428 201,074 6.40 127.96

TABLE 4.4 VEHICLE UTILIZATION AND ANNUAL OPERATING COST AT LOW SPEED – NEW BUS





5 31.11 347,028 17.86 20,474 6,870 680,092 1,027,120 33.01 165.076 32.00 356,943 17.50 20,892 6,000 629,000 985,943 30.81 184.607 32.89 366,858 17. 16 21,303 5,384 593,233 960,091 29.19 204.34

8 33.78 376,773 16.84 21,708 4,926 567,041 943,814 27.94 223.509 34.67 386,688 16.54 22,107 4,574 547,231 933,919 26.94 242.4610 35.56 396,603 16.25 22,499 4,296 531,885 928,488 26.11 261.1411 36.44 404,086 15.98 22,886 4,072 519,541 923,627 25.34 278.7812 37.33 411,450 15.71 23,266 3,889 509,619 921,069 24.67 296.0613 38.22 418,695 15.47 23,641 3,736 501,554 920,250 24.08 312.9914 39.11 425,822 15.23 24,010 3,608 494,946 920,768 23.54 329.5915 40.00 432,830 15.00 24,374 3,500 489,499 922,329 23.06 345.8716 40.89 439.719 14.78 24,733 3,407 484,993 924,712 22.62 361.8417 41.78 446,490 14.57 25,086 3,328 481,258 927,748 22.21 377.5118 42.67 453,142 14.38 25,434 3,259 478,163 931,305 21.83 392.8919 43.56 459,675 14.18 25,777 3,200 475,605 935,280 21.47 407.9920 44.44 466,090 14.00 26 ,115 3,148 473,500 939,590 21.14 422.82

TABLE 4.5VEHICLE UTILIZATION AND ANNUAL OPERATING COST AT LOW SPEED – RECONDITIONED BUS





5 31.11 310,201 10.71 8,881 6,870 512,558 822,759 26.45 132.236 32.00 319,064 10.50 9,062 6,000 461,101 780,165 24.38 146.287 32.89 327,927 10.30 9,240 5,384 424,972 752,899 22.89 160.258 33.78 336,790 10.11 9,416 4,926 398,423 735,213 21.77 174.139 34.67 345,653 9.92 9,589 4,574 378,259 723,912 20.88 187.9410 35.56 354,516 9.75 9,759 4,296 362,563 717,079 20.17 201.6811 36.44 361,475 9.59 9,927 4,072 349,927 711,402 19.52 214.7212 37.33 368,341 9.43 10,092 3,889 339,718 708,059 18.97 227.5913 38.22 375,114 9.28 10,254 3,736 331,372 706,487 18.48 240.2914 39.11 381,795 9.14 10,414 3,608 324,489 706,284 18.06 252.8215 40.00 388,382 9.00 10,572 3,500 318,774 707,156 17.68 265.1816 40.89 375,114 8.87 10,728 3,407 314,005 708,882 17.34 277.3917 41.78 381,795 8.74 10,881 3,328 310,013 711,292 17.03 289.4418 42.67 388,382 8.63 11,032 3,259 306,667 714,255 16.74 301.3319 43.56 413,804 8.51 11,181 3,200 303,863 717,667 16.48 313.0620 44.44 419,927 8.40 11,327 3,148 301,518 721,445 16.23 324.65



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These estimates are presented in Tables 4.3 (Jeepney), 4.4 (New Bus) and 4.5(Reconditioned Bus). The presentation is limited to the practical range of speeds(above 3 km. for Jeepney, above 5 km./hr. for Bus). The tables also show theutilization assumptions involved in the total cost estimates and present the costssummarized as peso per km. and hour run.

The costs are also presented graphically in Figures 4.8 (Jeepney), 4.9 (New Bus) and4.10 (Reconditioned Bus). Again stacked bars are used to display the annual costssegregated into distance-related and time-related costs (left hand scale) and a curve toshow the cost per vehicle km. run (left hand scale). The horizontal bars relate topotential revenue, discussed further in Section 4.3 below.

4.3 Potential Revenues and Financial Viability -- Theory

Tariff scales for most public transport operations in the Philippines are regulated byLTFRB. After a long period in which fares have declined in real terms (and even innominal terms, as decreases in the dollar cost of diesel, combined with changes in thepeso-dollar exchange rate, led to lower fuel prices and a downward revision of thepermitted tariffs in the late 1980s), the scales have recently been increased.

Figure 4.11 compares the permitted fare for a 10 km. trip by bus or jeepney with thatcharged by LRT Line 1, with all fares converted to 1985 price levels using the MetroManila Consumer Price Index as a deflator. It can be seen from this that, although theDecember 1996 and October 1997 tariff revisions increased fares for the first time insix years, tariffs are still lower in real terms than any time prior to July 1993, and areonly 2/3 of their value immediately following the January 1986 revision.

The figure also shows that bus and jeepney fares for the same trip are similar (up toNovember 1988, they were identical). For a number of years, the tariff structure hascomprised a minimum (boarding) charge for trips of up to 4 km., with an additional(marginal rate) charge for every km. after the 4th.

The boarding charge has historically been between three and four times the marginalrate. The fare, in peso/km., thus approximates the marginal rate for all trips over 3 km.Bus and jeepney revenues, therefore, rise per passenger km. and, at any given loadfactor, per vehicle km. As can be seen from the figures presented in Section 4.2, theoperator’s costs, particularly in congested urban conditions, rise largely with thepassage of time.

The curves in Figures 4.5 to 4.10 show how cost per vehicle km. rises as averagespeed falls over the whole range of speeds likely to be encountered by urban publictransport. Figures 4.8 to 4.10 also show a horizontal line representing the marginalrate per passenger km. factored by the number of seats on the vehicle (18 for Jeepney,60 for Bus). The horizontal line, thus, represents the maximum rate at which incomecan accrue to the vehicle operator under normal operating circumstances.

On this basis, jeepney operation will be profitable at average speeds above 9 km./hr.,for new bus operation at speeds above 7 km./hr., and for reconditioned bus operationat any speed, provided the vehicle is fully loaded throughout the journey. In practice,load factors seldom reach 100%, and much of urban jeepney operation is at anaverage speed of less than 9 km./hr.



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The curves in Figures 4.12 (Jeepney), 4.13 (New Bus) and 4.14 (Reconditioned Bus)show cost per hour run (from Tables 4.3 to 4.5) and revenue/hr. curves based on100%, 75% and 50% load factors. These confirm the “break-even” points with 100%loading indicated in Figures 4.8 to 4.10, and also show that:

• Jeepney operation at a 75 % load factor is profitable at speeds above 20 km./hr.;• Jeepney operation with a 50% load factor is never profitable;• New Bus operations at 75% load factor become profitable at speeds above 17

km./hr.;• Reconditioned bus operation is profitable above 8 km./hr. at 75 % load factor; and• Reconditioned bus operations at 50% load factor may be profitable at high speeds,

possibly above 30 km./hr.

While these findings confirm that financial viability is possible for bus and jeepeneyoperations, the likelihood of any of the required combinations of circumstancesoccurring in Metro Manila, with the possible exception of high enough load factorsand speeds for reconditioned bus, are fairly low.

4.4 Potential Revenues and Financial Viability - On-Street Practice

The above theoretical conclusion that there are limited circumstances under which busor jeepney services could be profitable in Metro Manila contrasts with the high (andincreasing) number of vehicles registered to provide services in, to or from the NCR.This indicates that operators have found ways of closing the gap between costs andadequate revenues, by:

• Increasing revenue per unit of vehicle output;• Decreasing costs; or• Both.

Observation of on-street public transport and analysis of MMUTIS bus and jeepneysurvey data has indicated a number of ways in which operators are achieving this.

4.4.1 Increasing Revenue

The principle ways in which bus operators can obtain higher income per passengerkm. than that indicated in Section 4.3 is by offering value-added (premium) services–i.e., airconditioned (AC) and express–which are less regulated than ordinary busservices.



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FIGURE 4.8ANNUAL COSTS AT LOW SPEEDS – JEEPNEY

FIGURE 4.9ANNUAL COSTS AT LOW SPEEDS – NEW BUS

FIGURE 4.10ANNUAL COSTS AT LOW SPEEDS – RE-CONDITIONED BUS



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figure 4.5 annual costs –jeepney - jica · 2005-12-19 · 40 29.4 18.1 19.7 50 28.8 17.7 19.0 60...

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